2025-10-15 22:39:51
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America’s biggest banks roared into Q3 with their strongest results in years, fueled by a surge in dealmaking, record trading desks, and resilient consumers.
M&A volumes topped $1 trillion, volatility kept markets busy, and wealth management quietly became a star performer as rising equity markets lifted client assets and fee income. Credit quality remains solid, loan growth is accelerating, and even long-dormant divisions like services and retail banking are setting records.
The tone from the top is cautious, with sticky inflation, tariffs, and softening job growth still on the radar. But beneath the macro noise, the message is clear: the banking giants are back on offense.
Let’s break down the results.
Today at a glance:
The Big Picture
JPMorganChase: Trading Boom
BofA: Dealmaking Breaks Out
Wells Fargo: New Era of Growth
Morgan Stanley: Equity Crown Tightens
Goldman Sachs: Dealmaking Dominates
Citigroup: Firing on All Cylinders
Here’s an updated look at the largest US banks by market cap.
As a reminder, banks make money through two main revenue streams:
💵 Net Interest Income (NII): The difference between interest earned on loans (like mortgages) and interest paid to depositors (like savings accounts). It’s the primary source of income for many banks and depends on interest rates.
👔 Noninterest Income: The revenue from services unrelated to interest. It includes fees (like ATM charges), advisory services, and trading revenue. Banks relying more on noninterest income are less affected by interest rate changes.
Here are the significant developments in Q3 FY25:
📊 Dealmaking is back in business: M&A had its second-strongest third quarter ever. From Union Pacific’s planned $88 billion rail merger to Palo Alto’s $25 billion acquisition of CyberArk, confidence is returning in a big way, and advisory desks are humming again.
📈 Trading desks stay on fire: Volatility from tariffs, rate moves, and geopolitics kept clients repositioning portfolios, fueling another round of strong results. Record demand for financing from hedge funds kept both equities and FICC desks busy. Morgan Stanley reclaimed the equities crown from Goldman.
💼 Wealth steps into the spotlight: Rising stock markets gave wealth units a lift across the board. Client assets rose by double-digits at JPMorgan, Morgan Stanley, and Citi. It’s a clear sign that the push to diversify beyond lending into steadier, fee-based revenue is paying off.
🏦 Wells Fargo hits the gas: With its asset cap finally gone, Wells Fargo raised its return target to 17–18%, posted its strongest loan growth in three years, and climbed into the top 10 globally for M&A advisory.
⚠️ All eyes are on jobs: Consumers are spending and repayment rates look healthy, but most banks have padded reserves and called out signs of a softening labor market. Persistent inflation is also top of mind as credit quality stays in focus.
💸 Costs creep higher: Compensation climbed as deal activity surged, and banks are plowing more money into tech, AI, and talent. Even so, capital return remains strong.
🔑 Takeaway: Wall Street’s mood has flipped from cautious to confident. The engines of growth are running again, and banks are leaning forward.
Let’s visualize them one by one and highlight the key points.
Net revenue grew 9% Y/Y to $46.4 billion ($1.5 billion beat):
Net interest income (NII): $24.0 billion (+2% Y/Y).
Noninterest income: $22.5 billion (+17% Y/Y).
Net income: $14.4 billion (+12% Y/Y).
EPS: $5.07 ($0.23 beat).
Key developments:
📊 Markets & dealmaking roar back: Trading revenue surged 25% to $8.9 billion (a new record), while investment-banking fees rose 16% to $2.6 billion, powered by a 53% surge in equity underwriting and the busiest IPO quarter since 2021. Equities trading jumped 33% to $3.3 billion, and fixed income rose 21% to $5.6 billion.
📈 Guidance nudged higher: JPMorgan lifted its full-year NII outlook again to ~$95.8 billion (from $95.5 billion in July), reflecting strong loan growth and pricing power despite slightly missing quarterly NII expectations by $0.2 billion.
💳 Consumers stay strong: Debit and credit card spending climbed 9%, revolving balances increased, and delinquencies fell. JPM cut its 2025 card charge-off forecast to ~3.3% (from ~3.6%) as credit quality held up. It’s also been the best year ever for new Chase Sapphire accounts.
⚠️ Credit losses rise: Provision for credit losses rose 9% to $3.4 billion, the highest since early 2020, as JPM added $810 million to reserves tied mainly to card services. Net charge-offs included $170 million tied to the collapse of auto lender Tricolor, which CEO Jamie Dimon called “not our finest moment.”
🏭 $1.5 trillion US investment push: JPM announced a decade-long initiative to bolster domestic manufacturing, defense, energy, and frontier tech. The plan includes up to $10 billion in direct equity and venture investments, aligning with US policy priorities but positioned as a commercial strategy.
🧠 AI productivity tailwinds: CFO Jeremy Barnum said AI is already driving measurable efficiency gains across operations, though the company remains “anchored in facts and reality” when evaluating its impact.
🌐 Macro headwinds remain: Dimon cautioned about “a heightened degree of uncertainty” from tariffs, trade tensions, sticky inflation, and elevated asset prices. He noted “signs of softening, particularly in job growth,” and warned that credit losses in some non-bank financial sectors could be worse than in a typical downturn.
🔑 Takeaways: JPMorgan delivered a strong quarter across Main Street and Wall Street, with record trading revenue, surging deal activity, and resilient consumers. Yet the bank is preparing for a bumpier road ahead.
Key quote:
CEO Jamie Dimon: “While there have been some signs of a softening, particularly in job growth, the US economy generally remained resilient. However, there continues to be a heightened degree of uncertainty stemming from complex geopolitical conditions, tariffs and trade uncertainty, elevated asset prices and the risk of sticky inflation.”
2025-10-11 22:01:27
Welcome to the Saturday PRO edition of How They Make Money.
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Today at a glance:
🥤 PepsiCo: Overhaul Under Pressure
🛩️ Delta Airlines: Gaining Altitude
🍺 Constellation: Better Than Feared
🌿 Tilray: Momentum Builds
PepsiCo’s Q3 revenue grew 3% Y/Y to $23.9 billion ($90 million beat) and adjusted EPS was $2.29 ($0.03 beat). However, organic sales rose only 1%, missing expectations, as international strength continued to mask weakness in North America. The North America beverage unit was a surprising bright spot, growing 2%, but this was offset by a disappointing 3% decline in the North America foods business, where volumes fell 4%.
The quarter’s main development came from outside the company: activist investor Elliott Investment Management has taken a ~$4 billion stake and is in discussions with management. This has added a “sense of urgency” to PepsiCo’s turnaround plans, with CEO Ramon Laguarta outlining a strategy to “aggressively optimize our cost structure” and “accelerate portfolio transformation.” The overhaul includes cutting underperforming products, launching healthier options (higher-protein, higher-fiber), and further headcount reductions at Frito-Lay. The company also announced a major leadership change, hiring Steve Schmitt from Walmart as its new CFO.
PepsiCo reaffirmed its full-year outlook for low-single-digit organic revenue growth and roughly flat core EPS, providing a floor for investors. While the underlying business challenges in North America persist, the arrival of an activist investor has lit a fire under the company’s turnaround efforts, forcing a more rapid and decisive overhaul of its portfolio and cost base.
Delta’s momentum accelerated in Q3, with revenue rising 6% Y/Y to $16.7 billion ($120 million beat) and EPS of $1.71 ($0.19 beat). The results were driven by continued strength in premium and corporate travel, with corporate sales up 8%. Critically, the domestic main cabin business showed a rebound, with unit revenue rising 2% and reversing last quarter’s decline.
2025-10-10 20:03:18
Welcome to the Free edition of How They Make Money.
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As the saying goes:
"Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for a lifetime"
Over the years, I've been asked many times what useful investing tools I would recommend as part of the perfect research flow.
I want to share a tool with you that has dramatically improved my daily research process this year, and I can't wait for you to try it for yourself.
It's called Fiscal.ai, and you can start using it for free today.
Fiscal.ai now powers my charts and financial data and gives you a fast, affordable way to research stocks and build some of the visuals I use.
I’ve spent the past few months researching new stock ideas inside Fiscal.ai:
Screeners.
Chart builder.
Portfolio tracker.
Earnings materials.
Side-by-side comparisons.
Quick fundamentals overlays.
In particular, Fiscal.ai allows for the selection of specific company segments. Think Amazon's AWS or NVIDIA's Data Center revenue.
It’s become my go-to tool. I liked it so much that I reached out to them to propose a partnership and make them my official data platform.
Below are three simple, high-impact chart setups I’ll use often, and that you can recreate in minutes.
Data Center Revenue: NVIDIA vs. AMD
Capital expenditure comparison across Big Tech.
Forward EV/Sales multiple: CRWD vs. ZS vs. FTNT vs. PANW vs. OKTA.
Use case: Is the stock tracking the business or just sentiment?
It's as easy as selecting the companies you want to analyze and picking the metrics you want to see over time.
Below is a great example, with the wild fluctuation of Shopify's stock price while business metrics have steadily improved. It clearly shows the stock was overbought in 2021 and oversold in 2022.
You can swap in other metrics like gross profit or free cash flow if you are looking for specific trends.
Use case: Compare two or more series fairly, regardless of starting levels.
Add multiple metrics or companies.
Select Price % Change to see how a given metric has grown over time.
Choose “Index to 0” to see the % change with the same starting point.
Below is an example that shows NVIDIA's stock price and operating cash flow in the past 5 years. They are both up 13x, illustrating a perfect correlation.
Now you’re comparing relative performance from a common baseline, great for understanding who’s actually outperformed since a catalyst (earnings, product launch, guidance reset).
Pro tip: Index fundamentals too (for example, Operating Income TTM indexed to 0%). It shows whose business compounded faster if you compare several companies.
Use case: Track the exact formula your thesis rests on.
Rule of 40: Revenue growth + margin of your choice.
Unit economics pulse: Gross margin over time.
Cash efficiency: Free cash flow margin over time.
The only limit here is your imagination. Here's an example with a margin trend analysis.
Open Custom Metric.
Select your base fields: revenue, number of customers, you name it.
Build the formula.
Analyze it over time and between companies
Below is an example I created that pulls subscription revenue in % of total revenue for a software company.
Pro tip: Save your custom metric and re-use it across tickers for peer comps in one click.
I can now visualize more metrics with finer control (timeframes, axes, segment selection, custom metrics, formulas), so our write-ups bring crisper insights.
Fiscal.ai offers a free tier, which is the way I initially discovered the platform, and a great way to check it out.
Yahoo Finance is free, but it doesn’t offer a fundamental charting tool.
Ycharts is very powerful, but doesn’t offer company-specific segments and KPIs, and is cost-prohibitive ($300/month even on the standard plan).
Fiscal.ai‘s paid plans are much more affordable than YCharts. In fact, it’s nearly 8x cheaper (for example, Fiscal’s Pro plan is $39/month). And they have a proper free tier. So, when I share a chart, you can rebuild it, tweak it, and make it your own—without breaking the bank.
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Do it yourself: Easily explore on your own comparisons by using the free charting tool offered by Fiscal.ai, so you can research alongside me.
Cleaner signals: More “price vs. business” views, so we separate momentum from fundamentals.
Repeatable templates: I’ll standardize the best layouts (price vs FCF per share, Indexed revenue vs peers, Rule-of-40 trendlines) so you can apply them to any company we discuss.
15% off Fiscal.ai paid plans with our partner link.
I get a commission if you opt for their paid plan through our link, but I believe you'll also love the free tier, which will already improve your research flow and greatly complement our work here.
As always, I only partner with tools I actively use, and I have personally reached out to them to secure this partnership.
No. It’s an optional tool. But if you want to recreate charts and iterate for your own research or look up stocks that we don't cover, it’s the most cost-effective way to do it and truly an all-in-one platform.
The goal is simple: make your research faster, clearer, and more repeatable. Fiscal.ai helps us do exactly that. So expect improved visuals from me and a smoother path for you to dig in, compare, and build conviction on your own.
And if you make a killer chart, share it with us by replying to any of our emails! I’d love to feature member builds in future posts.
Disclosure: Fiscal.ai is a partner. If you use our link, it may support App Economy Insights at no extra cost to you.
I own AMD, AMZN, CRWD, GLBE, GOOG, META, SHOP, and ZS in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members. The Starter Stocks for 2025-2026 just came out.
2025-10-07 22:08:04
Welcome to the Premium edition of How They Make Money.
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That makes it the world’s most valuable private company, far ahead of Elon Musk’s SpaceX and TikTok’s parent ByteDance (as of October 2025).
The company’s ambition now extends far beyond paid seats. It is wiring a full-stack commerce engine into ChatGPT, aiming to convert conversational queries into direct purchases.
The goal is to master the journey from vague user intent to specific product, a place where today’s social discovery feeds still struggle. This could be a boon for Etsy and Shopify merchants that live in the long tail.
But this vision is gated by a brutal physical reality: it requires an AI power grid of unprecedented scale. This has forced a sophisticated and risky $100 billion partnership with NVIDIA, built on complex financial engineering and a high-stakes bet on the future of energy. Oh, and did we mention that new deal with AMD, where OpenAI will take up to a 10% stake?
This is a story about megawatts, money, and moats.
What’s inside:
ChatGPT goes after commerce
The OpenAI-NVIDIA deal
The OpenAI-AMD deal
Power is the moat
The cash reality of the AI bubble
Circular financing & accounting
NVIDIA’s Berkshire-sized problem
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Based on an internal forecast reported by The Information in April, OpenAI targets $125 billion in revenue by 2029.
ChatGPT alone is expected to reach $60 billion in revenue by 2029, primarily from paid subscriptions (Plus, Pro, Business, and Enterprise). It’s not unprecedented if you use Microsoft’s Productivity & Business suite as a comp ($120 billion in revenue in FY25), but it would require universal adoption in the corporate world at a time when competition is fierce in agentic work.
For perspective, Meta needed 12 years to go from ~$4 billion to ~$135 billion in annual revenue, across a family of apps used by 3+ billion people each month.
The bigger story is monetizing the free audience, starting with native shopping.
Search and social feeds push you toward what’s already popular. An assistant starts earlier in the funnel. You describe a problem, not a brand. That’s where long-tail inventory wins. The assistant can surface a perfect niche product you didn’t know to search for, and then close the loop inside the chat.
Instant Checkout inside ChatGPT: Users can discover and buy without leaving the assistant (rolling out with Etsy listings in the US, with Shopify next). Even if the first version of checkout is basic, ChatGPT would offer the shortest path to fixing a problem with a purchase. It’s the on-ramp to monetizing the free audience with commerce.
Merchant rails and payments: OpenAI published an open standard so sellers can make their products shoppable inside ChatGPT. When multiple merchants offer the same item, enabling Instant Checkout becomes the way to be the link that converts. OpenAI says results aren’t pay-to-play, but the incentive is clear: wire your catalog and let the agent complete the funnel.
Upstream supply & siting: OpenAI announced memory-supply letters in South Korea (Samsung, SK Hynix) and discussions about hosting data centers there. It’s a wafer-to-watt hedge. The goal is to lock HBM and locations so inference capacity actually shows up as adoption grows.
That brings us to the massive deal with NVIDIA.
OpenAI is building an AI factory of unprecedented scale, and NVIDIA is fronting the $100 billion bill. The two giants plan to deploy millions of GPUs, totaling at least 10 gigawatts of computing power, to train OpenAI’s next-generation models.
2025-10-04 22:01:33
Welcome to the Saturday PRO edition of How They Make Money.
Over 200,000 subscribers turn to us for business and investment insights.
In case you missed it:
📊 Monthly reports: 200+ companies visualized.
📩 Tuesday articles: Exclusive deep dives and insights.
📚 Access to our archive: Hundreds of business breakdowns.
📩 Saturday PRO reports: Timely insights on the latest earnings.
Today at a glance:
👟 Nike: Early Wins
🛳️ Carnival: Firing on All Cylinders
🎿 Vail Resorts: Strategic Reset
Nike’s turnaround showed its first tangible signs of success in its Q1 FY26 (August quarter), with revenue returning to growth, up 1% Y/Y to $11.7 billion (a massive $710 million beat). It was the first quarter of positive growth since February 2024.
The growth was driven by a sharp rebound in Wholesale (+7%) as Nike rebuilt its retail partnerships, which more than offset a continued decline in Nike Direct (-4%). EPS of $0.49 also crushed estimates ($0.22 beat). Apparel sales showed positive momentum (+9%), offsetting a continued decline in Footwear.
CEO Elliott Hill’s “Sport Offense” strategy is delivering early wins. The Running category, a key focus, grew an explosive 20%, and sport-focused store redesigns are driving double-digit sales increases. However, management warned the recovery will be uneven.
Greater China remains a major weak spot with sales falling another 9%, and the company does not expect its Nike Direct business to return to growth in FY26. Gross margin also dropped by 3 points to 42%, pressured by discounts and a worsening tariff situation, which is now expected to be a $1.5 billion annualized headwind.
Reflecting these challenges, Nike guided for another revenue decline in Q2 (November quarter) with continued significant margin pressure. While the strong beat and clear progress in Running and Wholesale are encouraging signs that the turnaround is taking hold, persistent weakness in China and digital, along with mounting tariff costs, show that Nike’s race back to greatness will be a marathon, not a sprint.
Carnival delivered a phenomenal Q3, marking its 10th consecutive quarter of record revenue. Revenue grew 3% Y/Y to $8.2 billion ($40 million beat), while adjusted EPS was $1.43 ($0.11 beat).
Adjusted EBITDA hit a record $3.0 billion, driven by strong close-in demand, higher ticket prices, and a 2.5% increase in onboard spending. Customer deposits reached a new third-quarter high of $7.1 billion, and the booking curve for the future is exceptionally strong.
2025-10-03 20:03:26
Welcome to the Free edition of How They Make Money.
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In case you missed it:
It’s a staggering $55 billion deal, smashing the record for the largest leveraged buyout in history.
Mega-LBOs are high-wire acts by definition. They’re built on mountains of debt, leaving no room for a single misstep and sporting a notoriously mixed track record of success.
But EA isn’t a typical target. It offers critical advantages private equity craves: iconic annual sports franchises, predictable recurring revenue from live services, and a scale few rivals can match.
So, what to make of this acquisition for EA and the gaming industry?
Let’s review what we know.
At a glance:
The Deal: Why go private, and why now?
The Target: How EA became a predictable cash-flow machine.
The Arena: What this means for the future of the gaming industry.
EA is going private for $210 per share, representing a 25% premium to its pre-announcement stock price.
Buyers: Consortium led by Silver Lake, Saudi Arabia’s Public Investment Fund (PIF), and Affinity Partners.
Financing: Roughly $36 billion in equity and $20 billion in debt, with JPMorgan leading the debt package. PIF is converting its existing ~10% public stake into equity in the newly private company.
Leadership: EA says Andrew Wilson stays as CEO and HQ remains in Redwood City.
Target date: Closing is targeted for EA’s fiscal Q1 2027 (ending June 2027), pending approvals. Early reports also mention $1 billion termination fee if the deal doesn’t go through, similar to what we have seen when Adobe tried to buy Figma.
Regulatory Scrutiny: The deal requires a mandatory US foreign-investment review (CFIUS) due to the involvement of Saudi Arabia’s PIF. This is a standard process for such transactions.
The consortium is betting on recurring live-service cash flows (FC/Madden Ultimate Team-style modes, Apex Legends, Battlefield, The Sims) and the calendar certainty of annual sports releases. That combination of predictability and scale is precisely what gives the buyers confidence to use so much debt.
Licenses: NFL, F1, and the FC era (previously FIFA). Renewals and economics matter more with leverage, and the cash-cow franchises will do the heavy lifting.
Talent retention: Private ownership means less stock-based comp; keeping senior creatives is key.
Debt Service: The new EA will have significant interest payments. Any dip in performance or a broader market downturn will test its ability to service that debt. Watch for any pressure on cash flow, as the margin for error is now razor thin.
Big LBOs tend to succeed when the asset has durable, non-cyclical cash and a clear exit path (sell-down, re-IPO, or strategic sale). They stumble when deals are struck at peak cycles, when cost cuts hit the product pipeline, or when talent/licenses wobble.
EA’s test is brutally simple: Grow bookings, generate enough free cash flow to cover massive interest payments, and relentlessly expand its core franchises. Failure in any one of these areas is not an option.
Think products like Ultimate Team–style modes, microtransactions, subscriptions. They made up 73% of the overall revenue in the past 12 months, up from 64% in FY19 (ending in March).
I created the graph below using the Custom Metrics screen on Fiscal.ai, our data platform partner. It allows you to visualize any ratio or specific segment or KPI over time. In this example, I used Live Services revenue in % of overall revenue.
Net bookings = The total dollar value of what players bought from EA in the period (full games, in-game add-ons/live services, subscriptions, and mobile) whether or not EA has recognized it as GAAP revenue yet.
Plateauing: Net bookings set a high watermark of $7.5 billion in FY22 and have been flat since. Sports titles are mature at this stage of the console cycle. Apex Legends comps got tougher. Fewer ‘step-function’ launches in the past 3 years.
Industry backdrop: The global games market has been nearly flat over this stretch, from $184 billion in 2022 to a projected $189 billion in 2025, with consoles leading modest growth while mobile slowed. So EA has been in line with the industry.
LBO lens: stability is good for a leveraged buyout, but a return to growth will require new content catalysts.
Console is the anchor: Across the last decade, console has carried the bulk of revenue and captured most live-ops spend. The PS4→PS5 / Xbox One→Series transition didn’t break the model. Attach rates to Ultimate Team–style modes deepened on console.
PC is the steady No. 2: Smaller than console but meaningful, helped by Apex Legends, F1, and by frictionless digital delivery (EA Play/Steam).
Mobile grew through acquisitions: EA has struggled with mobile and most of its growth there since 2021 came from the acquisition of Glu Mobile ($2.1 billion) and Playdemic ($1.4 billion).
Physical → digital is basically done: The secular shift lifted mix, raised margin (no discs, no retail cuts), and increased the surface area for recurrent spend.
High gross margin: Digital delivery and live-ops content yield software-like gross margins. Platform fees and licensing are the big line items in cost of revenue.
Marketing is reasonable: Annual sports cycles and evergreen live services lower the need for blockbuster launch spend every year. Marketing scales with tentpoles rather than spiking unpredictably.
R&D is heavy by design: Ongoing engine work, live-ops tooling, annual sports updates, and large creative teams keep R&D as the biggest OpEx bucket. This is where cadence is funded.
Very profitable business: EA has maintained an operating margin above 20% in four of the past five fiscal years.
Predictability: Seasonal sports franchises + evergreen live-ops = steady bookings. The other IPs, like Battlefield and The Sims, offer potential for recurring entries over longer cycles.
Strong free cash flow: The digital mix and live services translated into a ~25% free cash flow margin profile, which adds a margin of safety.
License dependence: NFL, FC, F1. These games rely on sports franchises and likenesses, with royalty payments that involve lower margins. The loss of the FIFA partnership didn’t prove fatal, but it created an opening for new competitors to emerge.
Franchise concentration: Sports games and F2P title Apex Legends carry a lot. Because of this concentration, a single franchise misstep would be immediately and painfully visible in the booking trend.
Playbook contrast: Microsoft-Activision was a strategic consolidation (platform + IP + distribution). EA is a sponsor-led LBO math (leverage underwritten by predictable cash flows) with an operational focus rather than synergy headlines.
Why gaming fits LBOs now: Evergreen IP, live-ops monetization, subscriptions, and long tails dampen earnings volatility. That’s exactly what debt investors want.
Sovereign capital’s arc: PIF & Savvy Games Group have placed chips across the stack (publishers, esports, distribution). This bid extends that footprint and normalizes sovereign money in core gaming assets.
Why this capital matters: Deep pockets mean EA can fund multi-year live-ops and big bets without quarterly whiplash. That aligns with an LBO built on recurring bookings.
Liquidity & re-listing path: If Silver Lake re-lists down the road, today’s structure could morph into a more “traditional” exit later. That’s useful context for timelines.
Premium debate: A ~25% premium, as seen in this deal, can look “light” for trophy assets. Sponsors would argue that the currency is certainty and speed. But the real benefit for the company will be post-close investment pace in the roadmap, not the headline premium.
Below is a post from Eric Kress (Gossamer Consulting) that neatly frames why a take-private can be both a relief and a risk for the industry. I’m sharing it because it surfaces trade-offs across capital, cadence, and transparency, and it contrasts this deal with other recent outcomes
Activision: sold to a platform owner.
Ubisoft: independence reinforced by family/strategic holders.
Embracer: restructuring and portfolio pruning.
Follow-on LBOs: If debt markets stay open, expect more bids for IP-rich, live-ops-heavy assets and tooling companies. Big tech could also be on the case, and Take-Two has long been a rumored acquisition target as the largest independent US pure play, with GTA arguably the most valuable IP in the industry.
Sovereign money’s next moves: Where Gulf capital shows up next: Studios, sports-rights, or infrastructure. We previously discussed how Liberty Media was approached by the Saudi PIF for the F1 Group.
Regulatory stance: Outcomes of foreign-investment reviews will set the bar for future cross-border deals in gaming.
Licensing leverage: Leagues and major IP holders may seek longer terms and higher rev-shares as sponsors rely on their durability.
Platform economics: Any shift in storefront fees or promo rules at Sony/Microsoft/Steam changes third-party margins across the board.
Subscription pressure: Game Pass/PS Plus bundling is rising. Does it amplify live-ops attach or compress full-game ARPU industry-wide?
Deal supply: Restructurings (Embracer-style) feed assets into the market. Buyers will cherry-pick live-ops winners.
Exit lanes: Re-IPOs vs strategic sales, whichever reopens first, will shape sponsor behavior for the next few years.
NetEase, Take-Two, Ubisoft, SEGA, Square Enix, Capcom, Nexon, CDProjekt, and Paradox are next in line from a scale standpoint.
What do you think? Hit reply or let me know in the comments!
That's it for today.
Happy investing!
Thanks to Fiscal.ai for being our official data partner. Create your own charts and pull key metrics from 50,000+ companies directly on Fiscal.ai. Start an account for free and save 15% on paid plans with this link.
Disclosure: I own NTES in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members. The Starter Stocks for 2025-2026 just came out.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
